In July, European leaders broke their promises from March. In October, they broke their promises from July. The participation of private investors would now be much higher, they decided.

Following that summit, investors came to the logical conclusion that politicians have basically been lying at euro summits. They surmised that, if the economic situation in Greece and the political mood in Germany changed, then the owners of Portuguese and Italian sovereign bonds would also be asked to contribute. In the meantime, even normal individuals are now withdrawing their savings from banks across southern Europe.

Some bureaucrats are still saying that all will be saved in the end. But the man in the street doesn't believe that.

Who, in their right mind, would loan the Greeks money right now? They may pay it back. But they just declared they wouldn't pay back half their debt. So why won't they do that again? Why won't Spain or Italy follow their lead?

Italy is in particularly bad shape.

As things now stand, Italy's debt accounts for 120 percent of its annual GDP, growth is close to zero and the country is currently slipping into a deep recession. In fact, it's a matter of mathematical inevitability that Italy won't be able to service its loans if interest rates on its sovereign debt don't fall. Granted, there have to be reforms. But reforms don't resolve an acute debt crisis. We've already learned that lesson from other crises.

Much talk of Argentina and how it handled a crisis in its currency and debt. But that was 1 country. Not a collective.

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